Last Updated on 8 months by Anoob P T
Are you wondering what is the difference between Old Money vs New Money? In this post, we are going to look at Old Money vs New Money Differences, Examples, Which is Better.
The biggest difference between Old Money vs New Money is the source- old money is passed down through generations, where new money is made by the current generation.
Its very interesting that money as a subject is not taught in schools.
We’re just told to do well in school, get a job and money will take care of itself.
As someone who comes from a middle-class background, the subject of money has always interested me–because I never had any.
Also, many years back, I had a girlfriend who was very wealthy and from an old money family.
It was very interesting how our thoughts around money was entirely different and I could see she was right from her perspectives.
I started with a salary of $100 per month and went on earn roughly $5000 per month as salary (in addition to $6000 per month from side hustles)- so I think I did fairly okay.
I have also written a post on Liquid Net Worth–you can read it you are interested.
Although, I don’t fully agree with many of the concepts promoted by financial gurus like Robert Kiyosaki, some of his work makes me think.
I do a lot of research on the subject of money, because I find it fascinating to understand the thought process behind some of the decisions my parents, my friends and even I make when it comes to finances.
Old Money vs New Money: Differences, Examples, Which is Better?
Table of Contents
What is old money vs new money
Old money and new money are dependent on the source from where they come.
The simplest way to classify Old money is that it is inherited money whereas new money is the money which earned or “self-made”.
If you have inherited your wealth, then the money you have is old money, while if you are not from a not so wealthy generation and have worked hard and earned money then that money is new money.
One night I had a fight with my dad and I left home with around $400 and I had to work many jobs to get by.
Obviously the money I have is new money. Many years back, I had a girlfriend (now ex-girlfriend) who was very wealthy.
Her money mostly came from real-estate assets which was built by her grandfather-this is a classic example of old money.
Old and new money not only depend on the source from which they come but also are dependent on the spending habits of people.
Old money is spent differently versus new money and there are a lot of factors which differentiate old versus new money including social perception of them.
★ Typically old money is passed on for at least 2 generations.
★ Most of world’s self-made billionaires have new money.
★ Most of old money families are descendants of industrialists.
★ Percieved social value of old money is higher.
What is old money vs new money Great Gatsby
The Great Gatsby is one of the most acclaimed literary works in the world and the subject of old money vs new money is also presented to the reader.
The author makes it clear that the wealth of Tom and Daisy is superior to the wealth of Jay Gatsby because Tom and Daisy are highly educated, have inherited wealth and represent old money.
Gatsby made his own money and showed off by throwing extravagant parties which represents new money- more like new age entertainers or celebrities who like to party big.
The author also compares West versus East and links it to America where the East represents old money, and the West represents new money.
The author chose East to represent old money because families in America who come from old money live in the East if we look at American history.
People fled to the West in hopes of making new money, finding a workplace, and hoping to find gold, therefore he represents new money by the west in the book.
Buy the Great GatsbyWhat is old money
Old money in simple terms is inherited money someone has inherited from thier family.
Old money is usually passed down for generations in the form of real estate, companies or businesses that stand the test of time. Your social class (depending on where you live) is described by the type of money you have.
Across countries and societies, old money families who have wealth dating back many decades are considered more “classy” than families who are wealthy with new money.
Families who have been wealthy for many generations such as the Vanderbilts and the Rockefellers, are examples of old money families.
What is new money
Money which you have not inherited but have earned or made on your own is new money.
Interestingly, apart from few select families most new-age millionaires or even billionaires are self-made and therefore have new money. You can watch this interesting video on world’s richest self made billionaires if you are interested.
In terms of social status new money is often below old money because old money comes with royalties which is not the characteristic of new money.
Lower upper-class families are considered as new money families and they are found in occupation such as entertainment, sports, or technology.
New money vs old money: What are the differences
Old money and new money, both are money that you have, but they differ based on many characteristics. Few of the basis of differences are as follows:
Wealth Sources
One of the major differences between old money and new money is the source from which the wealth is earned.
New money is typically more recently made and old money is usually passed down generations.
New money is often related to celebrities and entrepreneurs who became wealthy within a short time period.
In developed countries including the United States, Old money families have their roots to industrialists who made a fortune during the early boom of the industrial age.
The number of years or generations the money has been passed through to describe it as old money is not set but in general have been moved through generations.
Perceived Social Value
Another major difference when it comes to old money and new money is how they are perceived in society.
Since old money has seen far more generations when compared to new money, old money families are seen to be more educated, respectable, and refined.
I can testify that this is true. When I used to interact with my old girlfriend, she used to talk about new money families like they are inferior and class-less.
The story of new money families can be described as rags to riches.
Such families don’t always have money and are dependent on their business or other sources of income for the riches.
Though both old money families and new money families have the same amount of wealth, new money families are still not considered as upper class by some sections of society and even old money families.
Spending Habits
Differentiating on the spending habits of these 2 families, old money families tend to be more frugal.
It means they spend less and only when it’s absolutely necessary because thier understanding of money comes from thier elders and often the hardwork required to generate money is drilled into thier children growing up.
When it comes to new money families, they are more inclined towards luxury. You can see them living expensive homes, driving expensive cars and wearing luxury clothing.
It should be noted that old money families typically spend lesser on liabilities and most of thier investments would be for profit.
Families with new money consider the money as their own and do not bother about passing it to the next generation.
They may be seen spending frivolously and showing off their wealth.
When it comes to old families, they know that they have to pass the money to the next generation therefore they are very practical about how they spend the money and mostly do not spend much on luxuries.
Old Money vs New Money Examples
As described above, old money is the money which is inherited.
It describes a social class of the rich who have to maintain their wealth over multiple generations.
Some families who’ve old money are, the Byrd Family of Virginia, The Carter Family of Virginia, the Randolph family descendant from William Randolph, the Roosevelt family of Manhattan, the Cabots who arrived in Salem from Isle of Jersey, the Lowell family descended from Boston colonists, the Forbes family off Boston and the Griswold family of Connecticut are a few of the major old money families.
Since money is acquired in this generation rather than by family inheritance, the term new money is often used derogatorily to show that the person previously belonged to a lower social class.
New money is often classified as wealth created by means of buying and selling of goods and services.
This generation of billionaires like Jeff Bezos, Elon Musk, Mark Zuckerberg, and Bill Gates do not have inherited money and they are self-made billionaires.
New Money vs Old money: Which is Better?
When it comes to social standing, old money considered better than new money.
Though it should not matter where the money comes from, the way old money vs new money families are looked up differs.
For old money families, the passing of wealth is a custom and they ensure wealth is preserved and passed on to future generations.
Most of modern-day entreprenuers or billionaires are self-made but that doesn’t make their achievements any less significant.
However, old money families look down at new money families and think of them new entrants to an exclusive club.
One of the factors could be jealousy because they could not make the money which new money families have made in this generation and have to live on the inherited wealth.
If you really think about it, most people who have new money have worked equally hard to make thier money like the founding members of old money families.
In my personal opinion, it doesnt really matter what type of money you have whether it is old money vs new money as long as you have money and your spending habits are in control.
Frequently Asked Questions about old money or new money
Is it better to have old money or new money?
Its slightly better to have old money because usually old money will be hard assets that can be liquidated in case the need arises.
Why does old money look down on new money?
Many reasons, one of them is that new money is considered as money made through buying or selling and new money families are not considered not classy enough.
Why are the differences between old money and new money Significant?
The significance is mostly because old money has lasted the test of time and old money families are considered more aristocratic with better polish.
What do old money think of new money?
Old money families consider new money as mostly immature, fatiguing and not classy.
Does old money still exist?
Yes, most old money is now diversified into investments that might overlap with new money.
Why is new money an insult?
Old money families look down at new money families and think of them new entrants to an exclusive club.
How many generations are considered old money?
2 Generations
Is Tom Buchanan old money?
Yes, Tom Buchanan is considered to be old money.
Who is the richest family ever?
Walton Family – Walmart with an estimated net worth of $251 billion.
Are the Rockefellers still rich?
Yes, even after 170 hiers, the Rockefellers have a net worth of over $11 billion.
What is the wealthiest generation?
Baby boomer generation.
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Old Money vs New Money
Old Money vs New Money Summary
In this post, we look at Old Money vs New Money key Differences, Examples and Which is Better?
Overall
5-
Old Money vs New Money
Pros
Old Money is passed through generations
Old money is usually invested in assets that stand time
Cons
Old money families generally consider new money families as inferior
